Landlord optimism hits three-year high
That is the most upbeat result recorded since Paragon first asked the question in mid-2010.
Landlords also feel more positive than before about the availability of buy-to-let mortgages, with 32% saying they thought adequate finance was ‘reasonably available’ in Q1 2013, up from 29% in Q4 2012. Just 2% of landlords thought buy-to-let finance was unavailable.
According to the survey, buy-to-let property generated an average yield of 6.2% in Q1 2013, with professional portfolio landlords getting higher returns than smaller landlords, at 6.6% compared to 4.7%.
The average void period landlords’ experienced across their portfolio decreased in Q1 to 2.8 weeks, compared to 3.0 weeks in Q4. Void periods have been steadily declining over a two-year period. The average dropped to its lowest level in Q1 2012 when it was 2.6 weeks.
John Heron, director of mortgages, said:
“The first quarter of 2013 has been a relatively positive one for landlords. The increasing level of optimism is a good indication of how landlords are feeling about the prospects for the private rented sector.
“Due to such high levels of tenant demand it is unsurprising that void periods continue to remain low. Whilst we have seen a good start to the year, we need to see landlords making further investments in their portfolios to try and meet the growing demand for rental property. The buy-to-let market has made great progress over the last 18 months but it is vital that the momentum continues in the coming months.
“Driving that momentum will be the smaller private investor landlords, who will find it easier to secure finance. Professional landlords who have traditionally been the backbone of the PRS are finding it hard to secure new finance and, with little equity to release, they will not be able to make the investment the sector needs.”